Serbia concluded 2025 with headline inflation at 2.7 percent and an annual average of 3.8 percent, marking a significant stabilization after the volatility of previous years. The outcome reflects the combined effect of monetary tightening, fiscal discipline, and easing global price pressures.
Food prices, while still elevated, rose more slowly toward year-end, while energy price adjustments were largely absorbed earlier in the year. Services inflation moderated as demand normalized and cost pressures eased. Importantly, inflation expectations stabilized, reducing the risk of second-round effects.
The disinflation process, however, remains incomplete. Producer price pressures persist in agriculture and selected industrial segments, creating latent inflation risks. Wage growth, running in the high single digits, could re-ignite demand-driven inflation if productivity does not keep pace.
From a macroeconomic standpoint, the inflation outcome strengthens Serbia’s policy credibility. Stable prices support investment planning, protect real incomes, and reduce financing costs over time. Yet maintaining this stability will require continued coordination between monetary, fiscal, and structural policies.
As Serbia enters 2026, inflation is expected to remain within target, but vigilance is required. Structural reforms, energy stability, and productivity growth will determine whether price stability can be sustained without constraining economic momentum.
